Nasdaq launched its long-anticipated £2.7 billion (€4 billion) hostile bid for the London Stock Exchange (LSE) yesterday, as the US exchange seeks to buy the 71.25 per cent of the exchange that it does not already own.
Nasdaq set January 11th as the first closing date of the offer - which it can extend to February 10th - adding that £12.43 a share on the table was its final offer.
However, Nasdaq revised down the minimum number of share acceptances needed for the deal to succeed to 50 per cent plus one share, from 90 per cent. Given that it already owns 28.75 per cent of the company, the lower acceptance level means Nasdaq needs only a little more than 21.25 per cent to get to over 50 per cent and secure the deal.
The LSE responded by reiterating its rejection of the offer, which Nasdaq originally put forward on November 20th.
"The board unanimously rejects Nasdaq's offer as it substantially undervalues the exchange and fails to reflect its unique strategic position," the LSE said in a statement.
In London trading, the market appeared unconvinced the offer would lead to a deal as shares in the LSE fell around 0.3 per cent after Nasdaq's announcement.
Competition among exchanges has intensified in recent months, with fee wars eating into profit margins and forcing exchanges to consider combining efforts. In addition, a group of global investment banks is considering creating its own trading platform to rival exchanges.
If the bid expires without a resolution, Nasdaq will be left with its 28.75 per cent stake in the LSE and will be blocked by the UK's takeover code from making another bid for a year. - (Financial Times service)
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